Financial flows: Red Cross and Red Crescent national societies

The International Federation of Red Cross and Red Crescent Societies (IFRC) is arguably the world’s largest humanitarian network with 186 national societies and some 100 million members and volunteers. Following on from our work on the movement’s financial flows in the GHA report 2010, we wanted to investigate this complex funding architecture further to better understand the different sources and volumes of funding and what the money is spent on. One key source of information is the annual reports produced by national societies.

Out of the list of 187 national society annual reports covering the period 2007-2010 provided to us by the IFRC in November 2010, it was possible to access 131. Of these, 68 showed data on income (covering 46 countries) and 62 showed data on expenditure (covering 44 countries).

The categories into which we grouped the income and expenditure data were not preset prior to the exercise, but evolved out of the ways in which the various national societies reported the data – there was no standardisation of reporting across national societies. As such, the same income source or the same outflow could be categorised differently for the various national societies, according to the descriptions used. This is particularly applicable for expenditure data which is reported less comprehensively than income data. For example, bilateral spending to national societies may be described as ‘RC national societies’ in one report but as a ‘project sector’ in another report.

Income

Our findings show that income raised domestically decreases as the country-level income decreases (see figure 1). National societies from high income countries raised 77% of their income domestically, whereas national societies from low income countries raised 11% of their income domestically. National societies from low income countries were more dependent upon funds from within the Red Cross and Red Crescent movement (18%) whereas national societies from high income countries did not receive any funds from within the movement.

Figure 1. Sources of income for Red Cross/Red Crescent national societies, 2007-2010, according to country income levels

Expenditure

The largest proportion of funds spent by national societies from high income countries went towards blood/first aid/ambulance services (41%), (see Figure 2). The largest proportion of funds (44%) spent by national societies from low income countries was on disaster preparedness and risk reduction (DPRR) whereas national societies from lower-middle income countries spent most of their funds on projects/appeals (54%). However, as mentioned previously, reporting of expenditure data is relatively weak which poses limitations for data analysis.

Figure 2. Expenditure by Red Cross/Red Crescent national societies, 2007-2010, according to country income levels

Annual reports are used by some national societies as a way of reporting their financial information, however not every national society provides a financial statement in their annual report and those that do vary in the detail they give. The lack of standardised reporting also means that data which is disaggregated by source or sector is not comparable across societies. Nonetheless, with some improvements annual reports could be a good tool for Red Cross and Red Crescent national societies to provide transparent financial data.